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As Government prepares to unveil its strategy towards the country’s adoption of the Euro in 2008, EuroCommerce secretary-general Xavier Durieu warns the best system for smooth adoption of the European currency is not through a transitional period of dual currency, but an “immediate” overnight switch-over, as the Germans did.
To qualify this theory, Durieu explains that the dual currency transitional period will “harm, confuse and practically leave consumers and business practically in a bigger mess than expected.”
Durieu, a staunch supporter of the Euro and its success, explains that it has been proven that where governments allowed a longer transition period, burdens and costs for consumers and businesses were high. “That is why inflation rises, and abuses come about.”
With a dual currency, businesses are left to carry the costs of double tills, stock two currencies, and double price tagging, says Durieu, who puts forward a question of how the Germans made it “overnight” to adopt the Euro and forget the mighty Deutsche Mark.
“You just have to put yourself in the same frame of mind as when you go abroad. On the plane you just immediately start to adapt yourself to the new currency you will use,” he says.
However, Xavier Durieu also warns about the timing and the mechanics towards the introduction of the Euro. Firstly, one must keep in mind that adopting the Euro on January 1 is not a good idea, as it is in the peak of the Christmas and January sales period. It’s an added burden to business, and harms consumers alike.
Secondly, the matter is definitely not one to be brushed onto businesses. “The banks must do their job too and assume their responsibilities,” he says.
Banks must be open from midnight of the given day and stay operational all throughout the night and serve the people with their new money. “Businesses are business and not banks, and the state should ensure that they will not serve instead of banks to supply the new money.”
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